Better Dividend Stock: Whirlpool vs. UPS
The sustainability of both stocks' dividends is in question.
Whirlpool has significant debt and near-term headwinds to overcome.
UPS also faces near-term headwinds, and that will pressure its dividend cover.
The 6.8% dividend yield of UPS (NYSE: UPS) stock and the 9.1% dividend yield of Whirlpool (NYSE: WHR) stock are obviously attractive for passive income-seeking investors. However, there's no such thing as a free lunch, and their yields reflect some doubt in the marketplace around the sustainability of their dividends. That said, which stock is better, and what risks do you need to know about before buying the stock?
Both Whirlpool's and UPS' shares are down heavily this year, as they've both suffered a deterioration in their trading conditions.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »
For Whirlpool, it comes down to a combination of stubbornly high interest rates and competitor behavior in light of President Donald Trump's reelection. Relatively high interest rates curtail the housing market and, in turn, discretionary demand (which tends to be higher-margin than replacement demand) for housing appliances. Consequently, Whirlpool's first-quarter organic sales rose just 2.2% year over year, with organic sales flat in its key major domestic appliance North America business.
Whirlpool's sales were also highly likely affected by competitor behavior in the fourth quarter of 2024 and the first quarter of 2025. CEO Marc Bitzer said on the recent earnings call: "Asian appliance producers significantly increased imports into the U.S. ahead of the tariffs in the first quarter and fourth quarter, essentially loading the U.S. industry. This market disruption will likely continue into Q2 as competitors attempt to sell through their inventory."
With the first and second quarters negatively affected by such actions, 30-year mortgage rates still above 6.5%, and general uncertainty in the economy concerning tariffs, this casts some doubt on management's decision to maintain its full-year guidance.
Whirlpool's full-year guidance implies that its dividend is sustainable. For example, the guidance calls for sales of $15.8 billion with an ongoing earnings before interest and tax (EBIT) margin of 6.8%, implying an ongoing EBIT of $1.07 billion, dropping down to $500 million to $600 million in free cash flow (FCF). That's more than enough to cover the the $384 million in dividends that Whirlpool paid last year.
That said, there's a significant risk to the dividend if Whirlpool falters this year. The company has $4.8 billion in long-term debt and $1.85 billion in debt maturing this year, of which it plans to pay down $700 million and refinance $1.1 billion to $1.2 billion. Any significant deterioration in the FCF outlook may cause management to cut the dividend to shore up its balance sheet, not least in paying down debt.
Continuing the theme of looking at dividend sustainability, UPS management is clear on three things regarding the matter:
Its longstanding aim is to pay out 50% of its earnings in dividends, and it's committed to sustaining and growing the dividend
The current dividend of $6.56 per share is barely covered by the Wall Street analyst consensus for UPS earnings in 2025 of $7.11, implying a payout ratio of 92%
Management expects $5.7 billion in FCF in 2025, barely covering the $5.5 billion cash dividend
Whether you look at the payout ratio in terms of earnings (as management does) or FCF, UPS' ability to pay its dividend is beginning to look stretched. At the same time, UPS management is trying to finesse a 50% reduction in Amazon.com delivery volume by the second half of 2026, while dealing with a deteriorating demand environment. This could cloud UPS' ability to generate earnings and cash flow over the near term.
In its key U.S. domestic market, the decline in its average daily volume (ADV) in February and March was "higher than we expected," according to CEO Carol Tome on the earnings call. Moreover, UPS guidance for the second quarter calls for a U.S. domestic year-over-year ADV decline of 9%. Management declined to update its full-year guidance.
On balance, UPS' dividend looks more sustainable than Whirlpool's, so it wins the contest. UPS has $19.5 billion in long-term debt, which looks manageable compared to guidance for $5.7 billion in FCF in 2025. Whirlpool's $4.8 billion in long-term debt is far higher than its estimated FCF of $500 million to $600 million in 2025.
However, there's a good chance both could cut their dividends by the end of the year. That doesn't mean they are unattractive stocks; it just means anyone buying in for the dividend alone needs to prepare for potential disappointment.
Before you buy stock in United Parcel Service, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and United Parcel Service wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $623,685!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $701,781!*
Now, it's worth noting Stock Advisor's total average return is 906% — a market-crushing outperformance compared to 164% for the S&P 500. Don't miss out on the latest top 10 list, available when you join .
See the 10 stocks »
*Stock Advisor returns as of April 28, 2025
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Lee Samaha has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon. The Motley Fool recommends United Parcel Service and Whirlpool. The Motley Fool has a disclosure policy.
Better Dividend Stock: Whirlpool vs. UPS was originally published by The Motley Fool
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
8 minutes ago
- Yahoo
Oklo Selected as Intended Awardee to Provide Clean, Reliable Power to Eielson Air Force Base in Alaska
SANTA CLARA, Calif., June 11, 2025--(BUSINESS WIRE)--Oklo Inc. (NYSE: OKLO), an advanced nuclear technology company, has been issued a Notice of Intent to Award (NOITA) by the Defense Logistics Agency Energy (DLA Energy), on behalf of the Department of the Air Force (DAF) and the U.S. Department of Defense, to provide clean, reliable power through the deployment of an Aurora powerhouse at the Air Force installation selected for the project. This project serves as the DAF's microreactor pilot to enhance energy resilience and reliability for critical national security infrastructure. The NOITA again designates Oklo as the apparent successful offeror following a comprehensive evaluation process. Under the terms of the anticipated agreement, Oklo would design, construct, own, and operate the power plant, delivering both electricity and heat to the DAF's preferred installation, Eielson Air Force Base in Alaska, under a long-term power purchase agreement. "This Notice of Intent to Award reflects continued confidence in Oklo's ability to deliver clean and secure energy solutions for mission-critical infrastructure," said Jacob DeWitte, Co-Founder and CEO of Oklo. "We are honored to support national defense resilience objectives while demonstrating the value of U.S.-pioneered fast reactor technology." Oklo's Aurora powerhouse design leverages proven fast reactor technology to provide continuous, resilient energy that can operate independently from the grid—key attributes for energy security at remote installations like Eielson Air Force Base. About Oklo Inc.: Oklo Inc. is developing fast fission power plants to deliver clean, reliable, and affordable energy at scale; establishing a domestic supply chain for critical radioisotopes; and advancing nuclear fuel recycling to convert nuclear waste into clean energy. Oklo was the first to receive a site use permit from the U.S. Department of Energy for a commercial advanced fission plant, was awarded fuel material from Idaho National Laboratory, and submitted the first custom combined license application for an advanced reactor to the U.S. Nuclear Regulatory Commission. Oklo is also developing advanced fuel recycling technologies in collaboration with the U.S. Department of Energy and U.S. National Laboratories. Forward-Looking Statements This press release includes statements that express Oklo's opinions, expectations, objectives, beliefs, plans, intentions, strategies, assumptions, forecasts or projections regarding future events or future results and therefore are, or may be deemed to be, "forward-looking statements." The words "anticipate," "believe," "continue," "can," "could," "estimate," "expect," "intends," "may," "might," "plan," "possible," "potential," "predict," "project," "should," "would" or, in each case, their negative or other variations or comparable terminology, and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this press release and include statements regarding our intentions, beliefs or current expectations concerning, among other things, the benefits of the proposed acquisition, results of operations, financial condition, liquidity, prospects, growth, strategies and the markets in which Oklo operates. Such forward-looking statements are based on information available as of the date of this press release, and current expectations, forecasts and assumptions, and involve a number of judgments, risks and uncertainties. As a result of a number of known and unknown risks and uncertainties, the actual results or performance of Oklo may be materially different from those expressed or implied by these forward-looking statements. The following important risk factors could affect Oklo's future results and cause those results or other outcomes to differ materially from those expressed or implied in the forward-looking statements: risks related to the development and deployment of Oklo's powerhouses; the risk that Oklo is pursuing an emerging market, with no commercial project operating, regulatory uncertainties; risks related to acquisitions, divestitures, or joint ventures we may engage in; the potential need for financing to construct plants; market, financial, political and legal conditions; the effects of competition; risks related to accessing HALEU and recycled fuels; risks related to our supply chain; risks related to power purchase agreements; risks related to human capital; risks related to our intellectual property; risks related to cybersecurity and data privacy; changes in applicable laws or regulations; the outcome of any government and regulatory proceedings and investigations and inquiries; the risk that the acquisition of Atomic Alchemy fails to produce the expected benefits; and those factors in the other documents filed by Oklo from time to time with the U.S. Securities and Exchange Commission. The foregoing list of factors is not exhaustive. You should carefully consider the foregoing factors and the other risks and uncertainties of the other documents filed by Oklo from time to time with the U.S. Securities and Exchange Commission. The forward-looking statements contained in this press release and in any document incorporated by reference are based on current expectations and beliefs concerning future developments and their potential effects on Oklo. There can be no assurance that future developments affecting Oklo will be those that Oklo has anticipated. Oklo undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. View source version on Contacts Media and Investor Contact for Oklo: Bonita Chester, Head of Communications and Media at media@ Investor Contact: Sam Doane, Director of Investor Relations at investors@ Sign in to access your portfolio
Yahoo
9 minutes ago
- Yahoo
Inflation holds steady as data shows how prices are faring after Trump's ‘Liberation Day' tariffs
Inflation held steady last month, according to data that gives the first glimpse of how prices are faring since President Donald Trump's sweeping 'Liberation Day' tariffs. Consumer prices rose 0.1 percent on a monthly basis in May, while annual inflation stood at 2.4 percent, according to the Department of Labor's consumer price index. The report captures the period after Trump unveiled his global reciprocal tariffs in April and provides some insight as to whether businesses are bearing the brunt of the duties themselves or passing them on to customers. Analysts predicted to see a bigger increase, but some still warn the future is uncertain because tariffs keep changing. 'So far, inflation risks from higher tariffs are subdued,' Win Thin, global head of markets strategy at Brown Brothers Harriman, told Bloomberg. 'Nonetheless, US protectionist trade policy and uncertainty about the ultimate level of tariffs are downside risks to growth and upside risk to inflation. Bottom line: the fundamental USD downtrend is intact.' Since Trump announced his global reciprocal tariffs and the stock market was spooked, many of the duties were paused. However, 10 percent tariffs for most countries remain. Inflation has been slow to respond to the tariffs as most retailers are selling merchandise accumulated before the import duties took effect. Economists said that the reduction in the scale of some trade tariffs may have 'helped to restrain cost increases thus far,' Wells Fargo's Sarah House and Nicole Cervi said. 'That said, as the higher tariff regime persists, shielding consumers from the costs is likely to become more challenging,' the economists added. 'Only a few goods prices likely rose as a result of the new tariffs in May,' Pantheon Macroeconomics economists Samuel Tombs and Oliver Allen said in a note, Bloomberg reports. 'June will be a different story — while some providers of discretionary services probably cut prices or kept them low to sustain demand.' Walmart warned customers last month that they could see price rises because of the trade tariffs. The retailer's chief financial officer John David Rainey said that the tariffs are 'still too high.' 'It's more than any supplier can absorb. And so I'm concerned that consumer is going to start seeing higher prices,' he said. 'You'll begin to see that, likely towards the tail end of this month, and then certainly much more in June.' Reuters contributed reporting
Business Upturn
9 minutes ago
- Business Upturn
Illicit Cigarettes in European Union at Highest Level Since 2015, KPMG Study Shows
Stamford, Conn., United States: Smokers in the European Union (EU) consumed 38.9 billion illicit cigarettes in 2024, a 10.8% increase versus 2023, with serious repercussions for tax revenues, crime rates, and public health. France, the largest illicit market in Europe, reached 18.7 billion illicit cigarettes consumed last year, 37.6% of total consumption. Adding 10.2 ppt year-on-year, the Netherlands saw the largest increase in illicit cigarettes share, which doubled to 17.9% of total consumption. Countries such as Bulgaria, Greece, Italy and Portugal—andUkraine, outside the EU—have shown sizeable decreases in illicit consumption in 2024. Greece and Ukraine, in particular, saw as much as 30% declines vs. 2023. PMI calls for evidence-based regulation, predictable fiscal regimes, and strict law enforcement to address the roots of illicit trade while promoting economic stability and public health. Evidence shows that excessive tobacco control policies may be driving smokers to the black market. Philip Morris International Inc. (NYSE: PM) today issues an urgent call for effective policymaking to counter the growing threat of illicit trade in the EU. In 2024, 38.9 billion illicit cigarettes were consumed in the region—the highest level since 2015—accounting for 9.2% of total cigarette consumption, with governments losing as much as €14.9 billion in tax revenues at a time when many countries face intense economic pressures. PMI believes that exacerbating the issue are steep and abrupt tax increases, benefitting criminals who supply unregulated, untaxed and inferior products, including counterfeits, at a lower price. To combat this growing threat, PMI urges the adoption of evidence-based regulation with balanced and predictable taxation through tax calendars, continued public-private collaboration and enhanced support of regional and national law enforcement agencies, as criminal organizations dealing in illicit cigarettes have cemented their presence in higher-priced Western European countries. According to the 2024 KPMG study, commissioned by Philip Morris Products SA, a large number of counterfeit cigarettes were consumed in the EU in 2024: 15.3 billion, a 20.2% increase vs. 2023. Additionally, so-called 'illicit whites'—legally manufactured cigarettes smuggled across borders to countries where they have limited or no distribution—reached 8.2 billion. 'The illicit tobacco trade threatens the European economy, public health, security and social stability; today, higher-taxed and higher-priced markets such as France and the Netherlands are especially impacted by illegally imported and counterfeit goods,' said Christos Harpantidis, PMI's Senior Vice President, External Affairs. 'Its massive socioeconomic impact negatively affects tax collection, job creation, and legitimate businesses, the engine of our European economies. The availability of cheap, unregulated cigarettes in the underground economy also impairs efforts to reduce smoking rates and achieve a smoke-free future.' The 2024 KPMG report indicates the increase in illicit cigarette consumption was primarily driven by France and the Netherlands. The study points to an especially alarming situation in France, where 18.7 billion illicit cigarettes were consumed in 2024, almost 7.8 billion of which were counterfeits. In the Netherlands, illicit cigarette volumes increased drastically, by 1.1 billion—more than doubled in a year—reaching 17.9% of total consumption. Had these cigarettes been legally purchased, an additional €9.4 billion would have been raised in taxes in France and almost €900 million in the Netherlands. In contrast, countries such as Bulgaria, Greece, Italy and Portugal—and Ukraine, outside the EU—have made significant progress in curbing the illicit tobacco market. Greece, for instance, had a 6.2 ppt drop in illicit cigarette consumption in 2024, to 17.5%—the largest decrease the country has seen in a decade. 'Predictable tax regimes and robust support for local law enforcement actions have proven an effective policy recipe: We now know how to effectively counter the criminal entities that engage in the illicit manufacturing, distribution, and sale of consumer products. Other countries in the region should emulate that approach to get control over this dangerous trend,' said Massimo Andolina, PMI's President, Europe Region. 'This is the way forward if we are serious about defeating the illicit tobacco trade in our continent, which harms Europe's economies, undermines European competitiveness and growth, and opens the door to other criminal activities. Citizens cannot afford to be deprived of much-needed state revenues in this critical moment for Europe, which are being lost rather than applied to key issues such as defense, internal security, and social programs.' Illicit trade affects the whole of Europe Across the 38 European countries included in KPMG's study (the 27 EU member states, as well as Albania, Bosnia and Herzegovina, Kosovo, Moldova, Montenegro, North Macedonia, Norway, Serbia, Switzerland, Ukraine, and the United Kingdom), 52.2 billion illicit cigarettes were consumed in 2024, accounting for 10.0% of total consumption. Tax revenue losses amounted to an estimated €19.4 billion. Illicit cigarette volumes in the U.K. decreased by almost 0.8 billion in 2024, though illicit cigarettes as a share of total consumption remained stable. The U.K. is still the third-largest illicit market in Europe, with 5.9 billion illicit cigarettes consumed last year. Ukraine, in contrast,saw the largest decline in illicit consumption, with contraband and counterfeit volumes decreasing by 2.4 billion or 29% (vs. a 1.1 billion or 14% increase in 2023). This is the 19th consecutive year that KPMG has measured and reported on illicit cigarette consumption across Europe. Heated tobacco products For the first time, the KPMG study included in its scope the illicit consumption of heated tobacco products in selected European countries: the Czech Republic, Germany, Greece, Hungary, Italy, Lithuania, Poland, Romania, Spain, and the United Kingdom. The study reveals that contraband consumption stood at 0.4 billion sticks (the consumables used in heated tobacco devices) in 2024, representing 0.9% of total consumption. The highest contraband volumes were found in Germany (0.15 billion sticks) and Poland (0.08 billion), with the U.K. having the highest share (7.8%). To date, no counterfeit flows have been identified. 'Policymakers must recognize that repeating the policy mistakes that drive the illicit cigarette market when regulating smoke-free products—excessive and market-distorting taxation, extreme control measures such as bans, and inadequate law enforcement against illicit activities across the value chain—may and will lead to the same disaster we see today in the cigarette sector in countries adopting such policies, and that we are starting to see in countries banning the legal sale of smoke-free products,' said Andolina. — Illicit trade does not just affect the people who consume these products. It fuels ruthless criminal gangs, typically impacting the most vulnerable communities and populations. It deprives governments of critical revenues needed to fund public services, including security, defense and social services. And its proceeds facilitate other serious crimes such as human trafficking, corruption, and money laundering. For PMI, eliminating the illicit tobacco and nicotine trade has been a long-standing priority. The company implements preventive and protective measures and works with the public and private sectors to advance efforts to address this global issue. As PMI progresses on its commitment to deliver a smoke-free future—a future without cigarettes, by far the most harmful way to consume nicotine—it is increasing efforts to secure its supply chain and the products it sells and to protect consumers and its brands from smugglers and counterfeiters. PMI works closely with law enforcement agencies and other organizations worldwide to root out and shut down illegal activities, including counterfeiting and smuggling. A detailed overview of the results, country profiles and methodology of the KPMG study is available here. For more information about PMI's illicit trade prevention efforts, visit Note to editors Definitions of illicit cigarette categories, as detailed in the KPMG report: Counterfeit: 'Cigarettes that are illegally manufactured and sold by a party other than the original trademark owner.' Illicit whites: 'Cigarettes that are usually manufactured legally in one country/market but which the evidence suggests have been smuggled across-borders during their transit to the destination market under review where they have limited or no legal distribution and are sold without payment of tax.' C&C: 'Counterfeit and contraband, including illicit whites. Contraband refers to genuine products that have been either bought in a lower-tax country and which exceed legal border limits or acquired without taxes for export purposes to be illegally re-sold (for financial profit) in a higher priced market.' Other C&C: 'Other C&C comprises contraband which does not fall within the Illicit Whites definition. It is often Duty Paid product from both EU27 and non-EU27 countries. There may also be counterfeit of brands that are not trademark-owned by participant manufacturers.' Philip Morris International: A Global Smoke-Free Champion Philip Morris International is a leading international consumer goods company, actively delivering a smoke-free future and evolving its portfolio for the long term to include products outside of the tobacco and nicotine sector. The company's current product portfolio primarily consists of cigarettes and smoke-free products, including heat-not-burn, nicotine pouch, and e-vapor products. As of December 31, 2024, PMI's smoke-free products were available for sale in 95 markets, and PMI estimates they were used by 38.6 million adults around the world. The smoke-free business accounted for 42% of PMI's first-quarter 2025 total net revenues. Since 2008, PMI has invested over $14 billion to develop, scientifically substantiate, and commercialize innovative smoke-free products for adults who would otherwise continue to smoke, with the goal of completely ending the sale of cigarettes. This includes the building of world-class scientific assessment capabilities, notably in the areas of pre-clinical systems toxicology, clinical and behavioral research, as well as post-market studies. Following a robust science-based review, the U.S. Food and Drug Administration has authorized the marketing of Swedish Match's General snus and ZYN nicotine pouches and versions of PMI's IQOS devices and consumables – the first-ever such authorizations in their respective categories. Versions of IQOS devices and consumablesand General snus also obtained the first-ever Modified Risk Tobacco Product authorizations from the FDA. With a strong foundation and significant expertise in life sciences, PMI has a long-term ambition to expand into wellness and healthcare areas and aims to enhance life through the delivery of seamless health experiences. References to 'PMI', 'we', 'our', and 'us' mean Philip Morris International Inc., and its subsidiaries. For more information, please visit and View source version on Disclaimer: The above press release comes to you under an arrangement with Business Wire. Business Upturn takes no editorial responsibility for the same.
